In terms of yin and yang, his approach to wealth is uber-yang – all expanding. Very American. Buffett says he doesn’t like gold because it doesn’t produce wealth.

Exactly.

Those who like gold are also of the view that it doesn’t produce wealth.

It doesn’t produce wealth – it protects it.

Our economy, as well as every other closed system (including the human behaviour system), goes in cycles. We can exacerbate or we can diminish the effects of the top or bottom of a cycle, but we can’t deny its existence or stop it.

It’s physics.

Those who like gold are buying it because they see that we’re in the part of a cycle where we’re racing down a wave. And picking up speed.

The yellow metal is precious as money and as jewelry.

Gold is valuable as jewelry because of its beauty, malleability and durability.

Gold is valuable as money because “we” as a global aggregate have decided over many years and cycles that it is.

That confidence in the historical value of gold as money has had people as an aggregate – a group – purchase and store gold as a safety net when the economy contracts into a recession, depression or war.

The yellow metal doesn’t produce anything the way stock in a medical tech company or farmland does.

Instead it’s purchased to protect wealth when stocks crash or a natural disaster wipes out crops.

Those who watch the cycles see that we’re due for an economic winter. Overdue.

The average person might decide it would be a good idea to have 10 – 20% of their wealth in gold and/or silver for the bad times, and then other things as well that produce in good times.

So when it’s the top of a cycle they expand their economic summer’s harvest with things that produce, and when the economic winter comes they protect themselves with the rising price of precious metal.

On a geopolitical scale, countries such as Russia, China and India, have been ramping up their purchases of gold in the last number of years.

They are doing in the macro what a family does in the micro – they see winter is coming.

They’re hedging against a depression, economic winter or upheaval, where things that produce are unsettled.

In the case of Russia, China and India, the reserve currency status of the U.S. dollar in international trade is in question. It’s a cycle again, and periodically the reserve currency changes from one nation to another.

The change tends to start slowly and end quickly, and there are some winners and some losers.

The U.S. has printed fiat ’til the cows came home. That has historically caused hyperinflation. Certainly a loss of confidence in the value of the dollar. There’s upheaval for a while when the reserve currency crashes, and those in power make decisions behind their closed doors while new rules are set up.

In the macro, the nations involved are gathering gold right now.

In the micro, some people are putting gold into their portfolio. Even if all their “portfolio” consists of is a little cash, and a little silver or gold.